To help her avoid the pitfalls of sudden wealth (hello, in-ground pool) and make sure her windfall lasts, Karen should think about three things: liquidity(access to cash), stability (keeping ahead of inflation) and income (investments that generate interest and dividends).

The goal is to live on about 4% of her nest egg per year. That plus Karen’s likely annual Social Security income of $9,600 gives her about $37,000—and protects the bulk of her assets (which she’ll need for health expenses as she ages).

Cash: Karen should keep $30,000 in a savings account linked to checking, for easy access, and another $70,000 in a high-yield account. This gives her a three-year cushion, says Curtis.

Stability: If Karen invests $250,000 in a couple of conservative bond funds, the estimated 5% yield will provide some growth and protection against inflation, without market volatility.